National Cement Company has successfully acquired the assets of rival ARM Cement that has been in the red in a deal worth Ksh. 5 billion (US$ 50 million), Reuters reported on Tuesday.
The primary activities of ARM and its Tanzania and Rwanda subsidiaries are the manufacture and distribution of cement, mining, and processing of industrial minerals and chemicals, trading in other building products and the sale of fertilizers.
The deal will however only be limited to ARM’s local assets meaning that its subsidiaries will not be affected by the acquisition agreement.
According to Reuters, ARM cement was put under administration in August 2018 by some of its creditors, including commercial banks, over a Ksh. 19.2 billion (US$190 million) debt with its shares suspended from the Nairobi bourse as a result.
The acquisition by National Cement Company, owned by billionaire Business mogul Narendra Raval, was made possible two months later after the creditors solidly agreed to sell some of ARM’s assets and subsidiaries to minimize the piling debt.
Despite initially being Kenya’s second largest cement maker in the past, the company according to Reuters report has seen its market share plunge to just 10 percent after the clinker plant it built in Tanzania in 2014 failed to generate income.
Prior to its acquisition by National Cement Company, firms such as Oman’s Raysut Cement and Nigeria’s Dangote Cement had been mentioned as companies interested in acquiring assets of the in debt cement maker.
National Cement is a manufacturer and distributor of cement in Kenya and is a subsidiary of the Devki Group with interests spanning steel products, roofing sheets, aviation, and cement.